Calculate your full monthly obligation including principal, interest, taxes, and insurance (PITI).
Payment Breakdown
Principal & Interest:$0.00
Property Taxes:$0.00
Home Insurance:$0.00
HOA Fees:$0.00
Total Monthly Payment:$0.00
Loan Summary:
Loan Amount: $0.00
Total Interest (Over Life of Loan): $0.00
Understanding Your Mortgage Calculation
Buying a home is likely the largest financial commitment you will make in your lifetime. Understanding exactly how your monthly mortgage payment is calculated is crucial for financial planning and ensuring you do not overextend your budget. While many focus solely on the "sticker price" of a home, the actual monthly cash flow requirement involves several components known collectively as PITI: Principal, Interest, Taxes, and Insurance.
The Core Components of a Mortgage Payment
1. Principal: This is the portion of your payment that goes directly toward paying down the loan balance. In the early years of a typical 30-year mortgage, the principal portion is small, but it grows over time as the interest portion decreases (a process called amortization).
2. Interest: This is the cost of borrowing money. Calculated based on your annual interest rate and the remaining loan balance, interest often comprises the majority of your payment in the first decade of the loan.
3. Escrow Components (Taxes & Insurance): Most lenders require you to pay 1/12th of your annual property taxes and homeowners insurance premiums along with your mortgage payment. These funds are held in an escrow account and paid on your behalf when due.
How Interest Rates Affect Affordability
Even small changes in interest rates can drastically alter your buying power. For example, on a $300,000 loan, the difference between a 6% and a 7% interest rate is roughly $200 per month. Over the life of a 30-year loan, that 1% difference costs you approximately $72,000 in additional interest payments.
Using This Calculator for Better Budgeting
This calculator allows you to input specific values for property taxes and insurance, which vary significantly by location. When house hunting, always ask for the previous year's property tax bill and get insurance quotes early. Don't forget to include Homeowners Association (HOA) fees if you are looking at condos or managed communities, as these are paid separately but impact your debt-to-income ratio.
Example Calculation
Let's say you purchase a home for $400,000 with a 20% down payment ($80,000). Your loan amount is $320,000. If you secure a 30-year fixed rate at 6.5%:
Your Principal & Interest would be approximately $2,022.
If annual taxes are $5,000, add roughly $417/month.
If insurance is $1,200/year, add $100/month.
Total Estimated Payment: $2,539 per month.
function calculateMortgage() {
// 1. Get Input Values
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
var annualTax = parseFloat(document.getElementById("propertyTax").value);
var annualInsurance = parseFloat(document.getElementById("homeInsurance").value);
var monthlyHoa = parseFloat(document.getElementById("hoaFees").value);
// 2. Validate Inputs
if (isNaN(homePrice) || homePrice <= 0) {
alert("Please enter a valid Home Price.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
downPayment = 0;
}
if (isNaN(interestRate) || interestRate < 0) {
alert("Please enter a valid Interest Rate.");
return;
}
if (isNaN(annualTax)) annualTax = 0;
if (isNaN(annualInsurance)) annualInsurance = 0;
if (isNaN(monthlyHoa)) monthlyHoa = 0;
// 3. Perform Calculations
var loanAmount = homePrice – downPayment;
// Edge case: Down payment larger than home price
if (loanAmount 0 && monthlyRate > 0) {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var x = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPI = loanAmount * ((monthlyRate * x) / (x – 1));
} else if (loanAmount > 0 && monthlyRate === 0) {
// 0% interest case
monthlyPI = loanAmount / numberOfPayments;
}
// Calculate Monthly Tax and Insurance
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
// Total Monthly Payment
var totalMonthlyPayment = monthlyPI + monthlyTax + monthlyInsurance + monthlyHoa;
// Total Interest over life of loan
var totalCost = monthlyPI * numberOfPayments;
var totalInterest = totalCost – loanAmount;
if (totalInterest < 0) totalInterest = 0;
// 4. Update the UI
document.getElementById("resPrincipalInterest").innerText = formatCurrency(monthlyPI);
document.getElementById("resTax").innerText = formatCurrency(monthlyTax);
document.getElementById("resInsurance").innerText = formatCurrency(monthlyInsurance);
document.getElementById("resHoa").innerText = formatCurrency(monthlyHoa);
document.getElementById("resTotal").innerText = formatCurrency(totalMonthlyPayment);
document.getElementById("resLoanAmount").innerText = formatCurrency(loanAmount);
document.getElementById("resTotalInterest").innerText = formatCurrency(totalInterest);
// Show results container
document.getElementById("resultContainer").style.display = "block";
}
// Helper function for currency formatting
function formatCurrency(num) {
return new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(num);
}